5 Simple Ways To Manage Your Money Better

Tools to Help you Manage your Money - Perennial

Many people take no care of their money till they come nearly to the end of it, and others do just the same with their time — Johann Wolfgang von Goethe

Being good with money is about more than just making ends meet. Don’t worry that you are not a math whiz; great math skills are not really necessary – you just need to know basic addition and subtraction.

Life is much easier when you have good financial skills. How you spend your money impacts your credit score and the amount of debt you end up carrying. If you’re struggling with money management issues such as living paycheck to paycheck despite making more than enough money, then read on as you will discover some tips to improve your financial habits.

When you are faced with a spending decision, especially a large purchase decision, don’t just assume you can afford something. Confirm that you can actually afford it and that you haven’t already committed those funds to another expense.

That means using your budget and the balance in your bank accounts to decide whether you can afford a purchase. Remember that just because the money is there does not mean you can make the purchase. You have also to consider the bills and expenses you will have to pay before your next payday.

How To Manage Your Money Better

1.  Have & Use a Budget

What are the advantages and disadvantages of budgeting?

Many people don’t budget because they don’t want to go through what they think will be a boring process of listing out expenses, adding up numbers, and making sure everything lines up. If you’re bad with money, you don’t have room for excuses with budgeting. If all it takes to get your spending on track is a few hours working a budget each month, why wouldn’t you do it? Instead of focusing on the process of creating a budget, focus on the value that budgeting will bring to your life.

Also, your budget is useless if you make it then let it collect dust in a folder tucked away in your bookshelf or file cabinet. Refer to it often throughout the month to help guide your spending decisions. Update it as you pay bills and spend on other monthly expenses. At any given time during the month, you should have an idea of how much money you are able to spend, considering any expenses you have left to pay.

2.  Give Yourself a Limit for Unbudgeted Spending

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A critical part of your budget is the net income or the amount of money left after you subtract your expenses from your income. If you have any money left over, you can use it for fun and entertainment, but only up to a certain amount. You can’t go crazy with this money, especially if it is not a lot and it has to last the entire month. Before you make any big purchases, make sure it will not interfere with anything else you have planned.

3.  Track Your Spending

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Small purchases here and there add up quickly, and before you know it, you have overspent your budget.

Start tracking your spending to discover places where you may be unknowingly overspending. Save your receipts and write your purchases in a spending journal, categorizing them so you can identify areas where you have a hard time keeping your spending in check.

4.  Don’t commit to any new recurring monthly bills

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Just because your income and credit qualify you for a certain loan, does not mean you should take it.

Many people naively think the bank would not approve them for a credit card or loan that they can not afford. The bank only knows your income, as you have reported, and the debt obligations included on your credit report, not any other obligations that could prevent you from making your payments on time. It is up to you to decide whether a monthly payment is affordable based on your income and other monthly obligations.

5.  Contribute to Savings Regularly

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Depositing money into a savings account each month can help you build healthy financial habits. You can even set it up so the money is automatically transferred from your bank account to your savings account. That way, you don’t have to remember to make the transfer.


Without money management, personal finances are a bit of a mystery. This can lead to overspending and living paycheck-to-paycheck. Money management can help you have a better handle on your income and spending so you can make decisions that improve your financial status.

In the beginning, you may not be used to planning ahead and putting off purchases until you can afford them. The more you make these habits part of your daily life, the easier it is to manage your money, and the better off your finances will be.

partly culled from thebalance.com